Eurogroup chief: Aid to Spain banks to be disbursed next week

The 39.5 billion euros ($51 billion) Spain's euro-zone partners agreed to provide for recapitalizing four nationalized Spanish banks will be disbursed next week, Eurogroup President Jean-Claude Juncker said here Monday.

"The implementation of the program is well on track, meeting all required conditionality steps as enshrined in the memorandum of understanding," the Luxembourg prime minister said after a meeting of euro-zone officials in Brussels.

"We have also welcomed the decision by the ESM (European Stability Mechanism) board of directors to authorize the first tranche of the program of up to 39.5 billion (euros). The disbursements will be made in mid next week," Juncker said.

The four nationalized Spanish banks will receive 36.97 billion euros in European aid.

Nearly half of that total - 17.96 billion euros - will go to Bankia, while 5.43 billion euros will be disbursed to Novagalicia, 9.08 billion euros to CatalunyaCaixa and 4.5 billion euros to Banco de Valencia.

Another 2.5 billion euros will fund the participation of Spain's state-backed FROB bank restructuring fund in the Sareb "bad bank," recently set up to take on Spanish banks' toxic real-estate assets.

"Today has been an important day for Spain and for the ESM," Spanish Economy Minister Luis de Guindos said in Brussels.

The Spanish economy remains hampered by the fallout from the collapse of a long-building housing bubble, which left many of its banks saddled with toxic assets.

The Iberian nation's unemployment rate currently stands at 25.02 percent overall and more than 50 percent among young people. EFE